Salford's MediaCityUK has become embroiled in a huge row with the future of the British film industry at stake.

At the centre of it, the Office of Fair Trading is looking into Peel's proposed takeover of Pinewood and Shepperton Studios and whether, with MediaCityUK already in its ownership, Peel would have too large a share in the tv production business.

Peel Holdings is a profit making company. And it doesn't matter what area of business the company is in – be it shopping malls, airports, ports, property or the media – it's always looking at the bottom line. How to make more and more money.

Now campaigners and people in the media are concerned that Peel Holdings is aiming to get too large a share of film and tv production facilities, and will be able to push rents so high as to be restrictive for small and middle sized production companies.

That's what's at the heart of a current investigation by the Office of Fair Trading (OFT), which is looking into Peel's proposed £96million takeover of Pinewood and Shepperton Studios.

So far the takeover, under the name of Peel Acquisitions (Peel Pegasus), has been confined mainly to the financial pages – the concerns of shareholders, the offer of a buy out by Mohamed Al Fayed, Lord Michael Grade the chairman of Pinewood Shepperton kicking the press out of the company's Annual General Meeting etc etc…(see here for further details)

…But beyond this, people are questioning the motives of Peel – is the takeover about trashing green belt land to build 1400 houses, which would more than pay for the cost of the buyout? Is it about trying to gain a monopoly in tv and film production facilities? Is it about shifting the British film industry to Salford? And where is democracy, accountability and transparency in all this?

The Office of Fair Trading is primarily concerned with whether Peel will have a share over 20% of the `provision of studio facilities for the production of television programmes', if the takeover goes ahead. If Peel does have over 20% of the market the OFT can instigate a thorough forty day investigation. And following that, the Government could refer the deal to the Competition Commission, as media companies may suffer by the lessening of competition in tv studio provision..We understand that Peel is claiming it will have a share of just under 20% but others beg to differ…

"It is a stretch to believe that the company post-takeover will be below 20% of UK tv studio provision" argues Jonathan Stuart-Brown of the Film Industry Lobby Group "They seem on course by 2014 to house Coronation Street, Eastenders, Emmerdale, primetime shows such as Jonathan Creek, Waking The Dead, New Tricks, Dragon's Den, The Apprentice, Ricky Gervais sitcoms, many Ant and Dec and BBC Saturday night Light Entertainment shows, Robin Hood, Match of The Day, BBC Sport, BBC Children, BBC and ITV North-West News, BBC Documentaries, BBC and SIS global leadership post-production facilities…"

The list goes on and on, and if Peel own production facilities at Pinewood, Shepperton and Teddington studios, as well as MediaCityUK in Salford, there are concerns that once a large share of the market is established, rental for studios and production facilities will start rising.

Already, the high rents at MediaCityUK have seen media companies locate either at the alternative Manchester Sharp Project or, in Salford, outside of MediaCityUK itself at the Digital World Centre.

At one point, MediaCityUK was empty of large media companies, except for the BBC and Salford University, although ITV has now taken space. Smaller scale companies are based at MediaCity's Pie Factory and the Greenhouse although, as yet, there's no word on whether independent production companies can afford to use Peel's studio and production facilities.

While the OFT is looking at Peel's share of tv production facilities, strangely, it is not looking at the company's share of film production facilities should the Pinewood Shepperton takeover happen.

"Peel alleged that there was nearly an issue with tv studios provision but none at all with film industry studio provision because MediaCityUK has made no films, and you have to presume they said they were going to make none there in the future" says Jonathan Stuart-Brown "This seems a remarkable claim given their Vision document from about three years ago where they stated that film making was planned separate to tv production and the digital creative industries."

The actual wording was "mediacity:uk makes room for all whether digital media, TV and film production, broadcasting or publishing…mediacity:uk can provide new business opportunities."

And this under another paragraph which stated "it won't take long for all 200 acres of mediacity:uk to rise up by the banks of the Manchester Ship Canal". (see here)

Phase 1 of MediaCityUK, which includes the BBC, only takes up around one sixth of the total site. Should the takeover go ahead, is Peel planning to run down the famous Pinewood and Shepperton film studios and re-locate them in Salford, or elsewhere for that matter?

The Salford Star asked Peel Media if it intended to house film production on the remaining portion of the undeveloped MediaCityUK site but the company has so far failed to respond.

Residents who live near Pinewood Studios fear that the Peel takeover bid is about running down Pinewood – and more to do with property development and green belt destruction than the British film industry.

Pinewood Studios (of which Peel currently has a 30% stake) has submitted `Project Pinewood' (see here) plans to South Bucks Council to develop 100 acres of green belt land next to its studios, including the construction of 1400 houses. It's been at the centre of a Public Inquiry which only finished last month, with the results expected soon.

As the Stop Project Pinewood website (see here) states, "Many people in the film industry believe that if this scheme were to get the go-ahead Pinewood Group's primary profit-centre would shift from being a film production facility to one of land developers which would seriously damage the British film Industry and destroy jobs in the area"

It adds: "Pinewood Group has let their last remaining section of back-lot for gravel extraction and there is concern at the spiralling cost of hiring stages at Pinewood Group Studios, which may be part of a plan to price film companies to stay away, prior to redevelopment."

If you do the maths, the profit on 1400 houses in leafy South Bucks well outweighs the £96million price that Peel is planning to pay for the Pinewood Group, which also includes Shepperton and Teddington studios as well as a Los Angeles sales office and a sales agency for studios in Malaysia, Canada, two in Germany and one in the Dominican Republic.

"Pinewood's directors recommended that the Peel bid was a good offer because much of Pinewood's land was greenbelt!" says A Gears, a local resident "No mention of their massive PR campaign to overturn 100 acres of that land into a housing development…

"When uncertainty over who will eventually own Pinewood Shepperton and other shareholder dissatisfaction is taken into account, one thing is clear - this project was never about the screen industry or the national interest" he adds "It was always a perceived opportunity for property investors to exploit a loophole in planning law and in that process, it will be those working in the screen industries who will suffer."

While there's absolutely no word from Peel on what its long term intentions are should it succeed with the takeover, people seem to be convinced that it's about moving film production to Salford's MediaCityUK and cashing in on the Pinewood land values.

"It is possible, given Peel's existing relationships with the BBC through ... MediaCityUK, that the acquisition of Pinewood is part of a mosaic of more significant development potential involving the BBC and its London assets" finance analyst Malcolm Morgan of Peel Hunt told the Financial Times "We cannot speculate on the overall value to Peel of Pinewood in this scenario."

Jonathan Stuart-Brown of the Film Industry Lobby Group takes it further…

"My best guess, based on many sources, is that Peel will, post-takeover, cash in quickly on the very expensive Pinewood, Shepperton and Teddington land values going into an Olympic 2012 property bubble" he says "We could be talking £2 billion to £3 billion which is not bad as they are buying at under £100 million, so a twenty to thirty fold profit.

"They will rebuild step by step the sound stages, and underwater tanks and backlots, post-production facilities on the Peel portfolio of North West lands" he adds "This will gentrify their holdings in accommodation, retail, hotels, and bless their self proclaimed £50 billion investment in ports, transport, energy and water provision.

"However, the 320 film industry companies which own the cameras, costumes, post-production equipment and skills at Pinewood and Shepperton may have to get ready to find Media City, Salford, on their sat-navs and hope the rents are not too high…"

At the moment this is all speculation. And many people in Salford might think it a good thing if big movie production comes to MediaCityUK. But at the heart of the argument is the ethics of one company having too much control and power over a whole industry – and, almost a whole region, if ports and canals and Wirral Waters and Atlantic Gateways and everything else that Peel does is included.

Behind Peel Holdings stands Isle of Man tax exile, John Whittaker, who, according to the Sunday Times Rich List, has seen his personal wealth double over the last year to over £2billion.

If the Pinewood Shepperton takeover goes ahead, Whittaker and Peel will have huge control over the means of mainstream media production – so who will be bold enough to investigate Peel Holding's dealings in the wider world?Will the BBC's Panorama or Newsnight or ITV's News At Ten take on their MediaCityUK landlords?

In a previous exposea few years ago, Peel Holdings likened people getting into bed with them as `dancing with the devil' (see here). And in the same feature, John Merry, Leader of Salford City Council accused the company of "an abuse of democracy…trying to buy an election".

The Office of Fair Trading has just a few days to decide whether Peel's takeover of Pinewood Shepperton will give them a monopoly of studio facilities for tv which might adversely affect the industry. If the OFT decide that there is a case and do a more thorough investigation of Peel Holdings, this might just be the thin edge of the wedge.

Anyone in the media industry concerned about Peel Holdings' takeover of Pinewood Shepperton is urged to contact the OFT as soon as possible, and before June 21st. All submissions by phone, letter or email are strictly confidential.

The OFT today cleared the Peel Holdings takeover of Pinewod but jewellery chain Wareen James Holdings has bought 19% of the Pinewood shares putting Peel's complete takeover in jeopardy.

Photo by Jemma Cooper

Munford wroteat 4:50:52 AM on Monday, June 20, 2011

No jobs then, no knock on effects for the local and wider community unless you are rich and well educated. I am not convinced locals will not see the opportunity to get some benefits or raise their skills to get jobs in and around the TV world. dificult to measure the value of investment until it gets underway but its something we should all take interest in.
Who is Warren James and whats he about. Looked him up he is called John Coulter but can't see the connection with Film, mind you Mediacity's about TV.
Disappointed with language from Salford Star.

mary ferrer wroteat 2:13:56 AM on Saturday, June 18, 2011

It is greed,that is the top and botton of it.Small film companies won't be able to pay the rent I seem to remember a few years ago talk about the way this move would open the door for the small flim makers, but now that looks like it was all hot air. The rich fat cats get richer and sod the rest. Nothing changes,sorry to say.

Jonathan Stuart-Brown wroteat 2:13:50 AM on Saturday, June 18, 2011

Let us hope that in the short and longterm that quality media jobs are created in Salford with a very goodly proportion going to local people.
A recent development today shores up the scenario of Pinewood and Shepperton moving to Salford. 17.2% of shares have been purchased by Warren James Holdings (the jewellers with over 100 stores mostly in the North West with a Stockport HQ). They bought at 210 p a share which suggests they will not sell for 200p next week. However, you can see that 'Diamonds Are Forever' and 'Goldfinger' association can bless their brand, make it a nationwide household name and indeed internationally known brand. They may just want to extract a premium from Peel if the latter will pay it to take this company private. But they may want to stay involved longterm if they see that the juxtaposition of their core retail business with high end glamour is the way to go.
However it plays out, let us hope that it leads to jobs for Salford people. If The OFT get involved in a significant way (and they are taking submissions up to June 21) they might block the Peel takeover bid but then Warren James or other North-West consortium step up and buy out Peel who would then have to sell at reasonable market value. Peel have claimed reasonable market value is 200p or to spell it out lower than Warren James seem prepared to pay having already paid 210p for the 17.2% of Pinewood shares they recently bought.

Salford Star wroteat 2:13:11 AM on Saturday, June 18, 2011

See Salford Lad in Manc comment below...shouldn't even dignify this crap with a response. You obviously haven't read anything we've wrote on the subject. The whole point is that we're constantly investigating the promises made to Salford people about MediaCityUK and the amount of public money going into it to see if there's any benefit to us. It's not about opposing it, it's about making public companies and councils accountable. You obviously believe they should be allowed to ride a PR wave of bullshit without any questions. Do you still believe there are weapons of mass destruction in Iraq? Sad man.

Salford Lad in Manc wroteat 2:03:27 AM on Saturday, June 18, 2011

Munford - but the Salford Star hates the people of Salford! It has done nothing but tell its readership that the job opportunities at MediaCity aren't for the people of Salford and that they shouldn't even aspire to attaining a decent job there. According to the Salford Star, the most the local population should aspire to are menial low paying jobs whilst purporting to be on the side of local communities in Salford. Talk about cynical opportunism and exploitation! Peel Holdings and the Salford Star are merely two different sides of the same coin.

Munford wroteat 3:03:11 PM on Friday, June 17, 2011

Are there jobs in it for Salford and surrounds
It's great to see media city in Salford and lets embrace the opportunities its bringing